Schäuble undermines Greek deal

German Finance Minister Wolfgang Schäuble cast doubt Tuesday on Europe’s latest rescue plan for Greece, claiming that many Germans would still prefer a ‘Grexit.’

Schäuble’s extraordinary comments signal a rift within Chancellor Angela Merkel’s government over whether to continue to extend aid. The comments are particularly notable because Schäuble was for the first time publicly distancing himself from Merkel, who fought for the agreement reached Monday after a 17-hour negotiating session.

In the past, Schäuble has disagreed with Merkel in private but toed the chancellor’s line in public.

“There are many people, also in the German federal government, that are pretty well convinced that (a Grexit) would be a much better solution for Greece and the Greek people,” Schäuble told reporters in Brussels. “But it’s something that only they can do themselves.”

His resistance will complicate Merkel’s effort to win her party’s backing for a third bailout when the Bundestag votes on the deal, which could be later this week if the Greek parliament backs Prime Minister Alexis Tsipras.

Schäuble is an influential figure within Merkel’s Christian Democratic parliamentary group and without his blessing, many conservative MP’s are unlikely to vote in favor of another rescue.

Schäuble came in for sharp criticism last weekend, especially in the Greek media but also from other EU policymakers, for pushing for the inclusion of a clause in the Greek deal providing the option of a temporary Greek exit from the eurozone if no deal were reached.

The proposal was denounced as “degrading” for treating Greece like a miscreant child rather than an equal member of the currency union.

“If Greece wants to do it, the €50 billion is not out of reach.”

It was excised from the final text during leaders’ negotiations, where the combative German minister stepped aside and his more emollient chancellor negotiated through a stormy overnight session to keep Greece in the monetary union.

Schäuble justified his actions Tuesday, saying the controversial proposal had full backing in Berlin.

“I just want to say … that I didn’t make any proposals that weren’t agreed upon inside the federal government and indeed, in terms of the substance and formulation,” he told reporters.

Schäuble was a dominant presence during the last-ditch talks among eurozone finance ministers Saturday and Sunday, which presented a document for discussion at the summit which began Sunday. The deal that emerged around dawn Monday forces leftist Greek Prime Minister Alexis Tsipras to go back on many of the anti-austerity promises that got him elected in January.

The German minister also insisted on the ambitious €50 billion privatization target for Greece — which Athens called unrealistic and “from another planet.”

“They can create assets, they can create assets!” Schäuble told reporters. “If Greece wants to do it, the €50 billion is not out of reach.”

Other finance ministers, including France’s Michel Sapin, stayed on hand for consultation with their leaders during the overnight emergency summit, but the German minister was resting in his hotel.

“Why would Schäuble be there? It was Merkel’s night,” said one EU official.

The minister himself agreed, telling reporters Tuesday: “Nobody can take the pressure to make decisions away from the person who carries the weight of the office of the chancellor.”

Related stories on these topics:

This is an opportunity to Greece. Well managed Grexit is light at end of tunnel and example to Europe’s NeoLiberal quasi German fascism

Posted on 7/14/15 | 6:38 PM CET

alan ritchie

Great statesmen/politicians know instinctively when to bow out others just linger on & create so much hurt & harm in their final days that it wipes away any positives from their earlier days… such is life.

Posted on 7/14/15 | 8:49 PM CET

Michael

Today a poll showed that 62% of Germans approved Schäubles battering of Greece: #ThisIsACoup Ms. Merkel! Tackle #Schäublexit or it will be your turn soon.

Posted on 7/14/15 | 11:19 PM CET

Klaus

Comments Schäuble and Tsipras made are quite interesting, IMHO Grexit is still on the table, but nobody wants to be responsible for a final decision.
Germany and the other Northern-EURO members will try to push Greece over the edge in the coming weeks, demanding more and more guarantees.

Germany’s agreement on a third financial aid package for Greece was a favour to France and Italy. Hollande and Renzi know that they would be the obvious targets when financial markets speculate on the next country to be forced to leave the Eurozone. All in the European spirit, of course.

Posted on 7/15/15 | 8:53 AM CET

Cesare

I believe Schäuble needs to go. If Merkel is smart and clever enough, she will get rid of her Minister of Finance. He’s a hawk, and a man-at-war, the General she needed to win the war. But the war is now over, Greece has surrendered; Tsipras has already “beheaded” his commander in chief, Varoufakis, in order to sign the peace (read surrender) treaty on Monday. Now it’s Germany’s turn to allow Schäuble to retire to private life. It is a necessity because, in order to win this wrestle with Greece, Germany had to show it’s true fiercest face… Schäuble’s. He’s now all but burnt, a true enemy of common people in the eyes of half of Europe (the southern half), and an uncomfortably tough ally in the eyes of the rest. The king is naked and everybody knows that Germans only think for themselves, and nobody knows when they might turn again any of the other countries. Germany now needs to wear a more accomodating face (just a face, mind) if they want the rest of Europe to (pretend to) forget their true colors. And Schäuble being where he is is a constant reminder of those.

Posted on 7/15/15 | 9:37 AM CET

alan.ritchie

and today we find that the ‘deal’ was predicated on the fraud that the IMF would/could be involved in supporting it!
Time for the cheerleaders of this fraudulent deal to explain themselves and then depart in the interests of rebuilding trust and confidence

Posted on 7/15/15 | 10:04 AM CET

Peer Erdinger

@ Cesare: “The king is naked and everybody knows that Germans only think for themselves, and nobody knows when they might turn again any of the other countries. ”
Ah yes. That’s why Greece gets another 80 Billion. Please explain an Lithuanian retire with much less money than the average Greek why she should pay that. This Rhetoric of war is tiresome. Nobody forces Greece tot take money. And most European tax payers are tired. If you want to give your money without rules and as a present you are free to do so. But dont ask Slovenians of Rumanians to do the same…..

Posted on 7/15/15 | 10:48 AM CET

Stella Mourelatou

Economics: In Germany, euro is undervalued because it’s overvalued elsewhere, This has worked in Germany’s favour. But if it is having second thoughts, it should consider how fungibility of a currency is affected if countries can leave.
Politics: Merkel is toughter than Schauble. If he openly disagrees he may end up losing his post.

Posted on 7/15/15 | 11:48 AM CET

Cesare

@Peer Erdinger: mine is not rethoric, this IS war, and it’s a classic. Economy is the battlefield where developed countries wage their battles in modern times. I’m not saying that Greece should have been given money without warranties in return, I live in Italy and we’re among the biggest creditors of Greece with some 40bln € worth of lent money, and I’d sure like to see my money back. I’m just saying that the whole concept of Europe was built on, from day one, was to be the perfect playground for Germany, starting with an overpriced common currency. People from many other countries, especially from the south of Europe, didn’t see that in the beginning, but have now realized that this Europe does not suit them as well as it does the Germans. What I’m also saying is that all this Greek tragedy has had one positive outcome, that is to show what Europe really is all about, and that there’s only one true master in there, Germany. Other little countries like the Baltics or Finland are just swimming in the wake of Germany, they are satellites and are not really relevant to my reasoning. What is relevant, what I was trying to say, is that most countries that saw Germany once as a partner to build a common house with, are now seeing it only as a competitor, as the proverbial fox in the european henhouse, as a result of the last happenings with Greece… personally, I’m happy all the cards are on the table now, it’s good to be able to clearly distinguish your teammates from those who are trying to score a goal in you net; this is one mandatory premise for a healthy competition, one that has to be fought at all levels, in all European institutions.
It’s now time to play hard ball, as Germany has been do doing that from the start. If these nations had the guts, the first thing to be done would be in the Europarliament, were the elected from the same country should leave PPE and PSE, Euroskeptics, and such meaningless coalitions, and instead rally into a single national block of voters, regardless of the matter at hand, in order to exercise a better lobbying in favor of the only legitimate interests at stake, National interests.

Posted on 7/15/15 | 1:41 PM CET

Erdinger

@cesare
well – so according to you Germany – and eastern Europe – just should give their money away. If they dont play according to the rules of a Greece leadership – which seems to be on drugs – its not cooperative enough. Well – if your idea of Europe is not just solidarity but Germany, Scandinavia and eastern Europe just accepting broken rules and contracts – well – then we have different ideas. I think the current war rhetoric is more harmful than anything Schaeuble could do…..

Posted on 7/15/15 | 2:16 PM CET

Cesare

@Peer Erdinger: when talking economics, solidarity has just sounds hollow, nowadays much more than ever. 😉
Let me repeat myself, I’m not criticising Germany or the Scandics or Eastern countries for demanding warranties from Greece, I’m lending my money to them as well, my country is, and I want my money back too. You keep on missing the whole point in my reasoning. This Germany-Greece match is only a pretext in my reasoning, it is its by-product that I wanted to focus on, the final “coming out” of Germany. The fresh evidence of what Europe is really about: the egemony of one country over the others, the explicit pursuing of National interests to the very detriment of communal goals, a game that Germany played since day one of the EU, but which other, naive, countries (like mine), blinded by idiotic marketing, by all those twinkling stars on a field of blue, never thought they could/should play.
And again, I don’t give a fig about the Eastern countries, they should have not been allowed to enter the EU in the first place, all those countries had their take when it was the turn to swallow money from the EU funding members, and until now have only been a dead weight, besides a source of cheap labor, and thus unemployment in the EU funding countries.
The Scandics are actually one country, Finland, 5.5 million people, negligible at best. The others never joined the Euro, so they’re even less relevant when looking at the big picture… regardless of the fact that, in hindsight, they were wery wise keeping their currency, they won’t have to bother to go back! 😉

Posted on 7/15/15 | 2:44 PM CET

Marili

Scheuble is clever enough to understand the last game Tsipras plays. Had you read what Tsipras said during an interview yesterday at Greek ERT, you would have understood that he will only support the agreement now to get to a safer side… He doesn’t ‘support the agreement’, he is ‘only obliged’ to accept it, he was ‘blackmailed’ etc. etc.….. Read between the lines….all the ‘disagreements’ in his party are fake just to persuade the no voters that their vote was not for nothing, the naive European leaders that they have saved the Eurozone and themselves (at any cost!!!). As the opposition will vote in favour of the agreement he said he will keep his party intact (those voting ‘against’ will not be expelled) so he will have the cake and eat it too…. Scheuble sees further than all the Renzis, Junckers and Hollands who are short-sighted and do not want to mar their political profile with a Grexit now. He understands it is impossible for Tsipras gov to implement any agreement (they only want a debt haircut without any obligations; this has never changed) and therefore a Grexit is preferable now than later when the cost will be much higher….

Posted on 7/15/15 | 2:50 PM CET

Thucydides

I strongly disagree; Schäuble is probably the only one who has put the interest of Greece above all else, by coming up with a solution which can solve THEIR problem. All the other players are primarily driven by the interest of “Europe” as they see it, by pushing their ideas about how the EU should develop, and by defending their countries interests within the EU.

Schäuble no doubt made the same analysis of the growth and sustainability of Greek debt that the IMF has now come forward with (why did Lagarde not bring it up during the weekend? The answer is not hard to guess). If Greece leaves the eurozone, real debt restructuring can take place without violating the German constitution, so Germany can actually help Greece. The current “solution” is more of the same, it will not work and make things only worse. You cannot force a people to change their culture unless they want the change themselves; enforcing it on the Greek will never work.

Posted on 7/15/15 | 3:09 PM CET

SKV

There is no such thing as properly manged collapse. Grexit means 10-15 yrs of pain with at least one generation condemn to poverty. Greece is the test stone for the whole EUR zone. 19 diverse economies cannot maintain single monetary policy (interest rates). Strong economies need high interest rate to avoid overexpansion while weak need low rates to stimulate growth. Another way – transfer money between weak and strong economies…

Yes, Greece cheated its way into EU, but now it boils down to two simple bad choices:
1. Write off some debt, give new loans and take over control over Greece economy. Greece will eventually recover. It will never pay back all loans including new one.

2. Kick Greece out and see state undone. EU will be stuck with failed state on south border for decades with every single problem associated with failed state.

Posted on 7/15/15 | 3:16 PM CET

Sven Stemmildt

@Cesare:
It is interesting how you stick to your principles, if they don’t meet your own interest (i.e.: not a tiny little bit).

You accuse Germany of being egotistic and trying to install a hegemony. But your own stance towards the eastern and scandinavic Europeans (“negligeable”, not worth a fig and so on) makes one thing clear:

YOU want a hegemony, but one of the southern nations. Germanys – an other nations – role should be to pay and shut their f***ing mouths.

Fortunately, there are people in southern Europe (and the whole of it) with a slightly less interest-directed Europeanism.

Posted on 7/15/15 | 4:02 PM CET

ironwoker

“Schäuble undermines Greek deal”

Of course he does, he’s “the bad cop” after all, and Merkel is “the reasonable” cop. Both are just rigid ruthless linear flat german sociopaths tormented by their sick ambition.

Posted on 7/15/15 | 5:46 PM CET

Klaus

@Cesare

> the explicit pursuing of National interests to the very detriment of communal goals, a game that Germany played since day one of the EU

You must be joking or you have no clue about Germany and german politics at all.

BTW: Germany was forced into the EURO by France – FACT! And Germany is abused by France and the South since day one of the EURO.

>I live in Italy and we’re among the biggest creditors of Greece with some 40bln € worth of lent money, and I’d sure like to see my money back.

Your elite have other goals, that is the reason they aligned with Cypress and France against ALL other EURO countries in the Greece case.

Posted on 7/15/15 | 9:30 PM CET

bob eriksson

As a U.S.A. outsider, here’s how I see it. If Germany or whoever else you want to blame had not called Greece’s bluff, they would have just have gone on borrowing and borrowing. Not only Germany pays their bills but peripheral countries, Estonia, Slovakia, Finland (which objected loudly) and others who have less generous pensions than Greeks. Grexit may be the best thing, because their currency will be cheap and holiday goers and investors will go there. Soon you can fight with the Brits who refuse to fund the Greek bailout. Chancellor George Osborne was in Brussels yesterday, and dismissed the idea as a “complete non-starter”.
“The eurozone needs to foot its own bill,” said Mr Osborne.”
Now if only you guys could find a way to sue Goldman Sachs for its part in hiding Greek debt. It is the most disliked corporation in the U.S.

Posted on 7/15/15 | 10:14 PM CET

Robert

Maybe politics is different in the US. The german view on Schäubles comment is, that he is strengthen the Greek deal with his comment. Because, if the greeks think they can play their games again, they will be out of the EZ. And there is a lot a german politics in this too, which international observers don´t know (beside the NSA of course). For those commentors who advise Ms. Merkel that Schäuble should lose his post, it is Schäuble who will garantie, that Merkels party will accept the Greek deal. There had been about 100 members of parlament of Merkels party who wrote some years ago, that they will not accept a third bail out. Without Schäubles OK, Merkel would be in deep trouble.

Posted on 7/16/15 | 12:44 AM CET

Erdinger

Cesare: We have a logical problem here. You say it’s not about Greece – but you say the example shows German egoism. Sorry – it’s only one or the other. If you argue with an example you have to stick to defend that example. Otherwise the argument just doesn’t work. So – if you can’t prove your point by an example – don’t use the example.
Funny how perspective is important. We Germans always think that it’s the other way round and many others benefit more than we do. We think many play it hard and there are only few ones that are diplomatic all the time. Maybe you are so used to it that you think that’s how it should be and get irritated when for once Germany uses a clear language? By the way – you won’t hear many comments like yours on all of eastern Europe in Germany.
We can discuss a lot about the right policy on Greece. But the war language used is not very helpful in this.

Posted on 7/16/15 | 10:47 AM CET

Cesare

@Erdinger: it’s not entirely about Greece, indeed. I repeat: the Greek incident was just a mean by which all other countries could see Germany’s true face. You should read newspapers in Italy, it’s almost hilarious how everybody’s woken up all of a sudden. 🙂
If you read again my first comment, in it you’ll find my thought about what Merkel should do if she was smart enough to wear again the patiently smiling, conciliatory, face (mind, again, only a face) and try to go back to maneuver the rest of the EU from behind the curtains: get rid of Schauble.
I was not irritated at all by the clear language of Schauble; that was good, actually, there, let them all see what this is all about. All my anger and despise is not for what Schauble SAID in this, but for what Germany has been DOING all along… for once, the words matched the doing.
I really don’t see from where Germans could get the notion that they benefit from the EU less than other countries. I couldn’t stifle a smile when I read that comment of yours, as that defies all logics and economical indicators.
But, thinking more about that… if nobody’s happy about this union, not even the Germans(!), it means the whole thing is a wreck. In the end, EU was always a stillborn, and what they’ve been doing for the past 13 years is just CPR to a corpse.

Posted on 7/16/15 | 2:16 PM CET

thefrankster

@Cesare – none of what you say makes a lot of sense.
Just because other countries look after their taxpayers’ funds you get yourself into a state (“this is war” etc.). Shame – not very grown-up.
P.S. Greece receiving 80 billion (on top of the 320 billion) represents a BIG concession by Germany, Poland, Finland, Austria, Lithuania etc etc

Posted on 7/16/15 | 5:37 PM CET

Klaus

>I really don’t see from where Germans could get the notion that they benefit from the EU less than other countries.

Just look at the Swiss and you get the picture, for decades the standard of living in Germany was on par, now there is a wealth-gap of 35%.

The Euro is costing Germany € ~300 Billion per YEAR, more than 10.000 Euro per family in lost wealth.

Posted on 7/17/15 | 12:30 AM CET

Daphné C.

People moaning about their imaginary lost taxpayers money are apparently unaware of the difference between a gift and a loan. Obviously that undermines their argument as Greece hasn’t been given anything so far and paid dearly all the “aid” “given”.
Of course, the fact that so many readers are unaware of these basic facts also reflects poorly on the media who informs them.

Posted on 7/17/15 | 1:38 AM CET

Robert

“imaginary lost taxpayers money” If someone is paying tax, than this imaginary money is real money. And it is not only taxmoney, which is lost (about 200B€, I would guess). If you have some money on the bank, you have lost about 30 % of its value, because the Euro is now more like the lira than the german mark. It is different in other countries, because they have experience with this situation. They spent their money in houses, which will gain in value if the currency lost value. If we could go back 15 years, I guess, now-one in Europe would say yes to the Euro. A common currency brings us far to near together.

Posted on 7/17/15 | 2:24 AM CET

Daphné C.

@Robert The taxpayers money is real. It’s the lost which is imaginary.
So far nothing has been lost, nothing has been given. All the “aid” was LOANS and they have brought billions of interest back, yet 95% of the average European citizens think it was a gift and none of their politicians ever deny it or brag about the good bargain that Greece is for them . How is that?

Posted on 7/17/15 | 3:16 PM CET

Robert

>> nothing has been lost, nothing has been given. All the “aid” was LOANS and they have brought billions of interest back, yet 95% of the average European citizens think it was a gift and none of their politicians ever deny it or brag about the good bargain that Greece is for them <<

Greece will never ever pay back the money, more than half of it will be lost. I know, that this loss will be getting real in ten or twenty years, at least after Merkel will step down in two years. Until than the greek crises will be positive for some governments and some exporting enterprises. I know too, that Germany is the country that will have less problems than other european countries, because Schäuble will not add new dept in the next years. Maybe we will even reach the Maastrich-rule in 2020. I wouldn´t mind the money if thinks would be getting better in all of Europe. Some things are getting better indeed, for example the economies in France and Italy are starting to improve at last. I guess you are French, and I think that Schäuble never thought, that your government would turn the situation in the French economy, but they did. Maybe Alexis Tsipras will repeat that, because, in the end, Greece has done many reforms. Without the Euro, I wouldn´t mind which way the other Euro-contries go. And of course do I know, that this is bad too, because the other countries want to go their way, not the german way. This is one of many reasons why the political situation in many european countrys is difficult. I do have noticed that Nicolas Sarkozy suffered after Merkel thought she should help him. By the way, Merkel has a very bad timing in those things. In the german politics it is seen, that if she helps someone, the end is near. In my view it was no surprise that the situation in greece went difficult as the situation in greece improves. This is always the most difficult moment. We have the same problem in germany, now, that the situation in germany has improved over the last ten years, e.g. the unemployment rate in East-Germany (20 million people) fell from 20% to under 10%. Without Schäuble we would be much worse economical. Well, the discussions with Greece will start now and maybe Alexis Tsipras has learned something in his first half year. I would say, there is a chance of 20 % that Greece will turn around economical.